Price of Lumber in 2025 - Everything You Need to Know

The COVID-19 pandemic profoundly impacted the global economy, and the construction industry wasn’t spared. One of the most significant outcomes was the instability of lumber prices. Where does it stand today? In 2025, lumber prices are more stable than in 2021. What factors have driven this recent stability, and what were the underlying causes of past fluctuations?

The Price of Lumber Is Sticking in 2025

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In 2023, lumber prices hit a historic low, approaching $365 per thousand board feet, a level nearly matching pre-pandemic tariffs. This drop stands in sharp contrast to the peaks reached in 2021, when prices surged to $1,260 due to supply chain disruptions and skyrocketing demand.

However, ever since, the price of lumber has seen a gradual increase, hitting $622.50 per thousand board feet on February 24, 2025. This increase partly results from the vast forest fires that ravaged several regions in 2023 and 2024, reducing the lumber supply available on the market. Although current prices remain higher than in 2023, they’re considerably more stable, avoiding the extreme fluctuations witnessed in recent years.

This stabilization can be attributed to a combination of factors. First, the supply chain disruptions have largely been addressed, enabling more consistent production and distribution. Moreover, market corrections have resulted in more predictable pricing, while fluctuating demand in the housing sector and other economic factors have contributed to this newfound stability. These trends have fostered a more stable market, benefiting both the construction industry and consumers.

What Contributed to the Initial Surge in Lumber Prices in 2021?

In 2021, the higher tariffs on lumber became a major challenge for construction industry stakeholders. This increase significantly exacerbated the challenges faced by construction contractors, who were already grappling with the adverse effects of a qualified labour shortage. So, what were the factors contributing to this surge?

1) Decrease in lumber production in British Columbia

Concerning the factors contributing to the situation, the first noted was the slowdown in production coming out of British Columbia, driven by the major floods and wildfires the province faced in recent months.

Additionally, the damage caused by mountain pine beetles, insects that devastated forests covering over 15% of the province’s land area, along with the destruction of about 50% of lodgepole pines, further exacerbated the issue.

2) Increase in American countervailling duties

Second, it’s hard to deny the significant impact that was had as a result of increasing countervailing duties imposed by the American economy, driven by what our neighbours to the south referred to as an unfair competition from Canada in the U.S. forestry industry. This increase was substantial, nearly doubling previous tariffs from 9% to 18%. 

As highlighted by the president of the forest committee of Quebec’s municipal unions (l’Union des municipalités du Québec), the changes made to the forestry regime were implemented with the hope of resolving the conflict that arose between the two countries. Unfortunately, the efforts made didn’t have the anticipated results, and countervailing duties had reached new heights, much like the price of lumber.

Certain big Canadian companies, such as Resolute Forest Products, had paid a much higher tariff, nearly 30%. While tensions surrounding the wood trade between Canada and the United States had been making headlines since 2017, the resulting impact was all the more substantial given the weakening state of Canada’s economy compared to the year prior. 

3) Surge in residential construction

Residential construction continues to thrive, both here and in the United States. Madison’s Lumber Report indicated a 12% surge in residential construction in November 2021 compared to the year prior. Whether used to build new homes or carry out renovations, lumber was in high demand. 

This trend, which didn’t peter out, further compounded the demand for lumber, which was already exacerbated by the need for rebuilding the homes destroyed by the previously mentioned natural disasters that ravaged British Columbia. 

Since the start of the year is often marked as the period during which businesses stockpile lumber for upcoming spring projects, it’s undeniable that the current demand has far exceeded the supply.

How Is the Lumber Industry Faring in Canada?

Is Quebec Resilient Nonetheless?

Michel Vincent, economist at the Quebec Forestry Industry Council, highlights that the province produces three times as much lumber as it uses. This self-sufficiency comes as a safety net should prices skyrocket again, guaranteeing a stable supply for the Quebec market, even though the situation may be more uncertain for the rest of Canada.

Additionally, the growing involvement of European producers in the North American market might help stabilize lumber supply. And these broadening supply channels may mitigate the risk of future price surges, ensuring a more consistent lumber availability—a commodity that continues to experience strong demand.

Rising Prices Resulting from a Trade War and Wildfires

Canada’s forest industry faces major challenges due to rising U.S. tariffs and the wreckage caused by recent wildfires. U.S. tariffs on lumber, which soared from 8% to 14.5%, are set to increase by 25% under the Trump administration, putting additional pressure on the industry. These rights are a constant source of tension between the two countries. The industry, already affected by the decrease in lumber supply resulting from more stringent environmental protection and fewer accessible forests, is now left facing the consequences of record-breaking wildfires.

In 2023, over 15 million hectares of forest burned across Canada, aggravating the situation by damaging vast stretches of woodland. This led to a decreased availability in harvestable lumber, and the quality of the lumber was still compromised by harmful insects, such as the whitespotted sayer, weakening the aesthetic value of lumber. This combination of factors disrupted the supply chain; certain sawmills had to cease their operations, increasing operation costs and creating uncertainty as to what the future holds.

While there is optimism surrounding the potential rebound in construction demand, the industry needs urgent support. Industry leaders are calling for government intervention to address the ongoing trade and environmental crises impacting the lumber industry.

FAQ

What is the market price of lumber today (per thousand board feet)?

As of February 25, 2025, the price of lumber stands at US$628.

How is the price of lumber calculated?

Several key factors dictate the price of lumber: 

1. Futures market: Lumber prices are dictated by futures negotiated by the NYSE Chicago.

2. Supply and demand: The demand for construction and renovation purposes drives prices.

3. Production costs: Logging, transportation, and sawmill processing costs directly affect prices.

4. Government policies and tariffs: Tariffs and trade policies can lead to volatile pricing.

5. Market reports: Agencies like Random Lengths publish price indexes based on transactions between producers and wholesalers.

These factors interact every day, driving the fluctuations in lumber prices.